Vancouver to host world’s first Bitcoin ATM

Gillian Shaw, Vancouver Sun10.26.2013

A pile of Bitcoins are shown here after Software engineer Mike Caldwell minted them in his shop on April 26, 2013 in Sandy, Utah. Bitcoin is an experimental digital currency used over the Internet that is gaining in popularity worldwide.

VANCOUVER — Vancouver will be home to the world’s first Bitcoin ATM when a Vancouver start-up installs one at a downtown coffee shop on Tuesday.

The automated teller machine will dispense the Bitcoins in exchange for cash and cash in exchange for Bitcoins, the cybercurrency that’s used for buying everything from coffee to cocaine and web services to fitness workouts.

The automated teller machine, made by Nevada company Robocoin, is being installed at the Waves coffee shop at Howe and Smithe in Vancouver by Vancouver’s Bitcoiniacs, a Bitcoin exchange store located near Granville Market.

“It’s the first Bitcoin ATM in the world,” said Bitcoiniacs co-founder Mitchell Demeter, who launched the store early this year with Jackson Warren and Cheyne Mackie, two friends from his school days where they all grew up on the Sunshine Coast. “We have four more coming in December and we’ll be spreading them out across Canada in major cities.

“Toronto, Montreal, Calgary and Ottawa is kind of what we’ve got our sights on but nothing is finalized yet.”

Bitcoiniacs is a Bitcoin broker, charging customers three per cent for exchanging Bitcoins for cash and vice versa. Bitcoin, which had its start as a currency for geeks has grown to become the most popular digital currency in the world and most recently got a boost when the giant search engine Baidu, China’s equivalent of Google, started accepting Bitcoin.

Bitcoin is virtual, existing only on the Internet but it trades for traditional currency and is accepted by a growing number of online product and services vendors as well as real world businesses. It’s trading for around $200 but it fluctuates widely, going from a low of $13 to a high of $250 in the past year.

At the Bitcoinacs ATM users will be able to deposit cash in the machine, which has a currency reader like the one that reads bills you feed into transit ticket machines. The cash is exchanged instantly on Canada’s VirtEx exchange for Bitcoins and a deposit is made to the user’s online Bitcoin wallet that can be accessed through a smartphone or any online device.

ATM users can also get cash from the machine in exchange for Bitcoins, reversing the process by sending Bitcoins from their virtual wallet to the ATM, which sells them on the market in real time and dispenses cash. The transaction limit for the ATM is $1,000 a day.

Vancouver is home to a growing number of Bitcoin users and an increasing number of merchants who accept the virtual currency. Among places where you can spend Bitcoin here: Waves and other coffee shops and restaurants; you can pay your landscaping bill with No Limit Landscaping, get a spa treatment with Pacific Bliss Massage or pay for personal training at Krystal Fit Studio.

WordPress.com, maker of the blogging software used bys The Vancouver Sun blogs, is among companies that accept Bitcoin.

“Vancouver has a very strong Bitcoin community,” said Demeter. “There are 50 to 70 people at weekly meetups, there is a lot of interest.

“A lot of people use them to spend around the city and people are using them as an investment. There are also a lot of people who prefer to use Bitcoin rather than a credit card to buy online.”

While at one time it was regarded as only the currency of choice for online black market items like drugs, the recent FBI shutdown of Silk Road that provided the biggest marketplace for such transactions only caused a brief drop in Bitcoin. Bitcoin is a decentralized currency that is neither owned or controlled by any agency or authority. As it has moved from marginal to at least growing acceptance, it is causing headaches for financial regulators.

Earlier this year the U.S. Financial Crimes Enforcement Network issued a report that put such digital currencies as Bitcoin under money services business and Bank Secrecy Act regulations.

In Canada, Demeter said since his company deals with a Canadian bank, anti-money laundering regulations require it get identification for clients transacting anything over $3,000.

Demeter said merchants like Bitcoin because, unlike credit cards, they don’t have to pay a fee to accept the currency as payment. Unlike charge cards, once a payment is made it’s irreversible, so there can be no charge back by the credit card company.

While that may represent a risk for consumers, some buyers prefer Bitcoin for the privacy it provides, since unlike a credit card it delivers no personal data about the payer.

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Vancouver to host world’s first Bitcoin ATM

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